The Cedar Innovation Foundation (CIF) has called on Congress to establish permanent protections against debanking, particularly in the cryptocurrency sector. This appeal was made in a statement posted on X on January 24, which highlighted the persistent pressure on banks to sever ties with the cryptocurrency industry.
According to CIF Engagement Director Colin McLaren, there is an urgent need for legislative action. "Congress needs to act on a permanent safeguard against debanking so that those responsible for Operation Chokepoint 2.0 cannot overreach and stifle innovation again," McLaren said. Upcoming Senate and House hearings are expected to address these concerns.
As reported by Paul Hastings, Operation Chokepoint 2.0 involves federal agencies pressuring banks to cut off services to the digital asset industry due to perceived risks. This initiative has complicated access to banking services for crypto companies and discouraged related activities, targeting lawful industries without clear justification.
DLNews reports that Coinbase obtained "pause letters" through Freedom of Information Act requests, which revealed that the Federal Deposit Insurance Corporation (FDIC) had urged banks to halt crypto-related activities. These letters from 2022 indicated a coordinated effort to restrict banking services for the crypto sector. Paul Grewal, Coinbase's chief legal officer, described it as evidence of a deliberate plan to debank a lawful industry.
According to its website, the Cedar Innovation Foundation aims to secure the future of blockchain technology in the United States by educating policymakers, supporting innovation, and providing regulators with tools necessary for navigating transformative economic and social changes.